City will collect an additional $1.28 million in taxes over the next five years that can be used to support schools, build roads and affordable housing
Similar audit in Brooklyn identified over $2 million in potential revenue
New York City will bring in up to an additional $1.28 million in revenue over the next five years because of changes at the Department of Finance prompted by an audit released today by New York City Comptroller Scott M. Stringer. The audit found nearly 100 mixed-use buildings in Queens that had been improperly assessed by the Department of Finance and taxed at an incorrect, lower rate.
Today’s findings follow a similar report from February which identified 197 misclassified mixed-use buildings in Brooklyn. Changes stemming from that audit will bring the City an additional $2.09 million in revenue over the next five years. Combined, the two audits identified an additional $3.37 million that will be collected through 2022.
“These two audits spurred immediate changes that will right a wrong and benefit our entire City,” Comptroller Stringer said. “To their credit, the Department of Finance took quick action after auditors identified misclassified buildings, and now the City stands to gain an additional $3.37 million in revenue over the coming years. That’s real money that can be used to build affordable housing, fix our streets, and support our schools.”
Properties in New York City are given one of four tax classes (Class 1 are one to three unit buildings, primarily used for residential purposes; Class 2 are all other residential properties; Class 3 are properties owned by utilities and special franchises; and Class 4 are all other properties not in Class 1, 2, or 3). This audit examined whether Class 1 mixed-use buildings in Queens were properly assessed and taxed by the Department of Finance as of May 2015.
Auditors identified 97 buildings that were misclassified as Tax Class 1 mixed-use buildings, and taxed at a lower rate than they should have been. DOF agreed that 78 properties should be taxed at 45 percent of market value, instead of the residential rate of six percent at which they had been taxed, and that 19 properties required additional interior inspection. In total, the Comptroller’s office estimated that after the changes are made, the City will bring in an additional $1.28 million in taxes over the next five years.
Auditors also found that 33 of the misclassified buildings in Queens had been inspected by DOF assessors within the last three years – raising questions about the agency’s training and inspection process.
The Department of Finance has already re-classified 78 of the properties, and agreed with all three of the audit’s recommendations, including that it should:
- Conduct an interior inspection of the 19 remaining properties identified in the audit as misclassified and ensure they receive the correct tax class;
- Make sure assessors are properly trained so they do not misclassify buildings; and
- Enhance its oversight and quality assurance to ensure buildings are properly inspected.
“The bottom line is that everyone should pay their fair share of taxes. The Department of Finance will now collect more revenue that will help to fund critical programs in our City. Going forward, this agency must strengthen its training and oversight to ensure properties in every borough are properly assessed, and the correct taxes are collected” Stringer said.
To read the full audit report, click here.
Similar audit in Brooklyn identified over $2 million in potential revenue
New York City will bring in up to an additional $1.28 million in revenue over the next five years because of changes at the Department of Finance prompted by an audit released today by New York City Comptroller Scott M. Stringer. The audit found nearly 100 mixed-use buildings in Queens that had been improperly assessed by the Department of Finance and taxed at an incorrect, lower rate.
Today’s findings follow a similar report from February which identified 197 misclassified mixed-use buildings in Brooklyn. Changes stemming from that audit will bring the City an additional $2.09 million in revenue over the next five years. Combined, the two audits identified an additional $3.37 million that will be collected through 2022.
“These two audits spurred immediate changes that will right a wrong and benefit our entire City,” Comptroller Stringer said. “To their credit, the Department of Finance took quick action after auditors identified misclassified buildings, and now the City stands to gain an additional $3.37 million in revenue over the coming years. That’s real money that can be used to build affordable housing, fix our streets, and support our schools.”
Properties in New York City are given one of four tax classes (Class 1 are one to three unit buildings, primarily used for residential purposes; Class 2 are all other residential properties; Class 3 are properties owned by utilities and special franchises; and Class 4 are all other properties not in Class 1, 2, or 3). This audit examined whether Class 1 mixed-use buildings in Queens were properly assessed and taxed by the Department of Finance as of May 2015.
Auditors identified 97 buildings that were misclassified as Tax Class 1 mixed-use buildings, and taxed at a lower rate than they should have been. DOF agreed that 78 properties should be taxed at 45 percent of market value, instead of the residential rate of six percent at which they had been taxed, and that 19 properties required additional interior inspection. In total, the Comptroller’s office estimated that after the changes are made, the City will bring in an additional $1.28 million in taxes over the next five years.
Auditors also found that 33 of the misclassified buildings in Queens had been inspected by DOF assessors within the last three years – raising questions about the agency’s training and inspection process.
The Department of Finance has already re-classified 78 of the properties, and agreed with all three of the audit’s recommendations, including that it should:
- Conduct an interior inspection of the 19 remaining properties identified in the audit as misclassified and ensure they receive the correct tax class;
- Make sure assessors are properly trained so they do not misclassify buildings; and
- Enhance its oversight and quality assurance to ensure buildings are properly inspected.
“The bottom line is that everyone should pay their fair share of taxes. The Department of Finance will now collect more revenue that will help to fund critical programs in our City. Going forward, this agency must strengthen its training and oversight to ensure properties in every borough are properly assessed, and the correct taxes are collected” Stringer said.
To read the full audit report, click here.
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